Acceptance Authorized, Conditions. Every municipality is authorized to accept, receive, receipt for, disburse and expend federal and state monies and other monies, public or private, made available by grant or loan or both to accomplish, in whole or in part, any of the purposes of this act. All federal monies accepted under this section shall be accepted and expended by the municipality upon such terms and conditions as are prescribed by the United States and as are consistent with state law; and all state monies accepted under this section shall be accepted and expended by the municipality upon such terms and conditions as are prescribed by the state. Unless otherwise prescribed by the agency from which such monies were received, the chief financial officer of the municipality shall, on its behalf deposit all monies received pursuant to this section and shall keep them, in separate funds designated according to the purposes for which the monies were made available, in trust for such purposes.